By A.J. Kaufman, Managing Editor
In the aftermath of the COVID-19 pandemic, a “new normal” was promised to Americans. And while perhaps that is valid in certain sectors of the economy, one probably would not include the housing market — whether around the country or throughout the Appalachian Highlands. With lingering tariff uncertainties and building challenges, volatility and tumult probably would be better word choices.
In existence for more than 90 years, Knoxville TVA Employees Credit Union (KTVAECU) currently has four locations in the Tri-Cities: Bristol, Johnson City, Kingsport and Piney Flats.
With its Great Depression roots, KTVAECU operates under the philosophy of “people helping people, members helping members” and aims to also understand the contemporary housing market.
The Credit Union’s Vice President, Real Estate Lending, Kendra Carpenter told the Business Journal that their loan applications have remained “very consistent” over the past 12-18 months, and first mortgage loans are significantly higher now than in the past.
“Naturally, we have seen an increase in the need for debt consolidation products as our area has seen an increase in cost-of-living expenses,” Carpenter added. “We are also seeing an increase in loan amounts with our purchase loans.”
As we move toward early summer, she says she expects KTVAECU’s first mortgage applications to continue to increase as more members enter the purchasing market. In March, she says the credit union saw a 20% increase in total file originations, and they expect that trend to continue in the coming months.
“Our members continue to utilize the equity in their homes by taking advantage of our home equity line of credit,” Carpenter explained. “It’s a great product and has been very popular in the past 12 months as members use their equity to finance home improvements, manage debt consolidation and enjoy other big life moments. We are also seeing first mortgage loan volume slowly increase with more home purchases in our area.”
When it comes to the complex and unpredictable topics of interest rates, Carpenter has modest optimism for buyers but admits it’s hard to foretell.
“Rates are a complex topic, and I wish we had a crystal ball to predict the rate future!” she said. “We are certainly optimistic, however, that as we move forward into 2025 that we may see a lower rate environment. We don’t expect drastic changes, but we are hopeful rates move slightly lower into the late spring and summer. Even a slight decrease makes a big impact on housing payments when purchasing a new home.”
According to recent information from the Zillow Home Value Index, home prices across this spring around the Tri-Cities were over 50% higher than March 2020 levels. In a recent statement regarding new home sales data, NAR Chief Economist Lawrence Yun noted in part that “the passage of time should bring about more inventory as life-changing events force some homeowners to give up their locked-in low mortgage rates…Aside from inventory growth, lower mortgage rates will be needed to get homeowners to move.”
